The Ukrainian national committee of the International Chamber of Commerce (ICC Ukraine) has called on the government to support the initiative to reduce the percentage of net profit that the Ukrainian Seaports Authority (USPA) is required to transfer into the state budget as dividends.
ICC Ukraine made the call in a letter, a copy of which the CFTS portal obtained.
ICC Ukraine stated in the letter that the decision to increase the percentage of net profits that state enterprises are required to pay as dividends to 90% on January 1, 2019, is negatively affecting their ability to fulfill their obligations. In particular, according to the letter, this situation creates conditions that prevent the USPA from properly implementing the relevant decisions of the Cabinet of Ministers, including Ukraine’s National Transport Strategy for the Period until 2030 and the Strategy for Development of Seaports until 2038.
It should be noted that the Ukrainian Ministry of Infrastructure has prepared a draft government resolution entitled "On Amendments to Section 1 of the Procedure for Paying Part of State Enterprises’ Net Profits (Revenue) into the State Budget,” which provides for reduction of the percentage of net profits that state enterprises are required to pay as dividends from 90% to 50-30% for state enterprises in the transport industry.
"ICC Ukraine would like to express support for the Ministry of Infrastructure’s initiative on reduction of the percentage of net profit that state enterprises are required to pay into the state budget, particularly the USPA, the leading enterprise in the maritime industry. Reducing the percentage of net profit that is payable into the state budget will free up the USPA’s resources to enable it to finance infrastructure projects of strategic importance. It will also allow it to make capital expenditures on modernization of port infrastructure and revise port charges with the aim of bringing them into line with the competitive environment at the global level," ICC Ukraine said in the letter.
As the CFTS reported earlier, the USPA expects the first concession projects to be launched and its dividend rate to be reduced to 30%. The absence of a reasonable state dividend policy in relation to the USPA makes development of the port industry unrealistic.
The increase of the percentage of net profit that state enterprises are required to pay into the state budget also applies to the Boryspil International Airport. The airport’s General Director Pavlo Riabikin has said that the airport could curtail its investment plans because of the increase of its tax burden from 40% to 90%.